In the Purchase of a Product

question 20

Multiple Choice

In the purchase of a product. time. effort. risk. and opportunity costs are all examples of:

• A) nonmonetary costs.
• B) soft costs.
• C) intangible costs.
• D) experiential costs.
• E) monetary costs.

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Definitions:

Indirect Materials

Supplies used in the production process but not directly traceable to a finished product, such as lubricants for machinery.

Direct Materials

Raw materials that are directly traceable and allocable to the production of specific goods or services.

Raw Materials

Basic substances in their natural, modified, or semi-processed state, used as inputs to a production process for subsequent modification or transformation into finished goods.

Direct Labor

The workforce directly involved in product manufacturing, whose labor is easily traced to the product itself.